Santander Mortgage Rates Slashed While Virgin Increases Fixed Deals

Amid recent economic policy shifts, Santander and Virgin Money have made notable changes to their mortgage rates, offering contrasting options for UK homebuyers and investors. Santander is reducing rates across its fixed-rate residential and buy-to-let mortgages, with reductions as high as 0.36%, while Virgin Money has opted to increase selected rates by up to 0.16%. These changes come shortly after UK Shadow Chancellor Rachel Reeves’ recent budget announcement, which has stirred anticipation for potential economic adjustments by lenders. In this article, I will run through the changes announced by the two lenders and also the impact that the recent budget might have.

Santander Mortgage Rates Lowered By Up To 0.36%

Starting Friday, Santander is cutting rates across its residential and buy-to-let mortgage products. This change follows an increase in rates last Tuesday, when the lender raised its new business and product transfer rates by up to 0.26%. So essentially backtracking on the rate increases it has already announced and reducing by a further 0.10%. Here is a more detailed breakdown of the changes announced, and for which type of property.

1. Residential fixed rates: Up to a 0.30% decrease across purchase, remortgage, and green ranges.
2. New build fixed rates: Lowered by up to 0.36%.
3. Buy-to-let fixed rates: Reduced by up to 0.20%.
4. Large loan fixed rates: Cut by up to 0.15%.

Virgin Money Increases Select Fixed Rates By Up To 0.16%

In contrast, Virgin Money is implementing rate hikes on certain fixed-rate mortgage products. The lender is raising rates by up to 0.16% on selected two- and five-year fixed deals for purchases, as well as on buy-to-let mortgages at different loan-to-value (LTV) levels.

Key increases from Virgin Money include:

1. Two- and five-year purchase rates with a £995 fee: Up by 0.15%, starting from 4.14%.
2. Retrofit boost five-year rates for both purchase and remortgage: Increasing by up to 0.15%, starting at 4.49%.
3. Buy-to-let five-year rates: Rising by 0.15% at 60% LTV and by 0.10% at 75% LTV, both starting from 3.88%.
4. Product transfer rates: Three-year rates will increase by up to 0.16%, with five-year rates rising by up to 0.15% at 65% and 75% LTV, starting at 3.94%.

Potential Impact Of Rachel Reeves’ Budget On Mortgage Rates

Chancellor Rachel Reeves’ budget announcement on the 30th of October 2024 has led to speculation regarding possible fiscal reforms that could affect inflation and, consequently, interest rates. While her policies aim to tackle the cost-of-living crisis, there is still uncertainty about how the proposed measures could influence the mortgage market. In my opinion, Santander’s decision to lower rates might reflect their optimism around lower inflation, potentially spurred by Reeves’ policies, however Virgin Money’s rate increases could be a more cautious approach to potential market volatility and job uncertainty could also play a big role.

What Borrowers Should Consider

These rate adjustments by Santander and Virgin Money underscore the importance of staying informed in a fluctuating mortgage market. Borrowers may find Santander’s rate cuts appealing for lower monthly payments, particularly in fixed-rate residential and buy-to-let categories. Conversely, Virgin Money’s increases may signal a need for borrowers to lock in lower rates now, if feasible.

Speak To A Mortgage Advisor

Given the ongoing economic adjustments, and Reeves’ five-year plan outline in the budget, borrowers and investors should always speak with a mortgage broker like ourselves at Oportfolio Mortgages, to tackle these changes. With political shifts and economic strategies evolving, UK homebuyers face a critical moment for securing favourable mortgage terms. Going it alone when getting a mortgage is never a good idea, that’s why you should always give our team a call to see how our experts can help you.